When posting payments in a practice management system the need for accuracy is essential. Inaccurate postings can result in serious downstream financial affects for your practice. Though the importance and possible negative ramifications of posting payments inaccurately are seemingly obvious, mistakes can easily occur with a simple typo. When posting an insurance payment to the practice management system, a $90.00 adjustment can easily become a $9000.00 adjustment with the slip of a finger. Here are some possible downstream effects of these errors and helpful ways to prevent them.
Downstream Effects of Inaccurate Payment Posting
When transactions are posting in excess of their true amounts it will leave a credit on a patient’s account. If left uncorrected or unnoticed this credit may be carried over to subsequent balances due. For example, a posting error resulted in a $9,000.00 credit on a patient’s account. The patient’s subsequent surgery leaves an $8,000.00 patient balance towards their high deductible plan. The credit that resulted in error may be used to cover the patient’s portion of the surgery with no monies received from the patient. This error in posting has now cost the practice $8,000!
Deflated Accounts Receivable
Credit balances within the practice management system result in a deflated accounts receivable (AR). Credit balances are subtracted from the practice’s account receivables and may provide reporting that suggests the practice is more financially stable than it actually is. This $9,000.00 credit now resides with Blue Cross Blue Shield. On the aging report, BCBS is showing a balance of $10.00 over 60 days old. Does this sound too good to be true? Probably because it is! When adding the credits back into the report, there may actually be over $9,000 in BCBS claims over 60 days old which could signal a much larger claims processing issue. Due to the credit this issue may not be detected in a timely manner, once again resulting in a $9000.00 loss to the practice.
Incorrect Patient Statements
When financial transactions are posted incorrectly it results in inaccurate information on the patient’s account. This information is often shown on the statements the patients receive for balances due. The worst case scenario is that patients are receiving statements for balances they do not actually owe. Additionally, they may NOT be receiving statements for balances they do owe. In the interest of customer service, accuracy in patient statements is essential. Patients are often confused by the insurance billing process. When statements received are not accurate it perpetuates this confusion and may result in a loss of returning patients. Now in addition to losing revenue your practice is losing patients and future revenue.
How to Prevent Errors
The most effective way to prevent these errors is through attention to detail. Each transaction posted should be reviewed for three key balancing factors.1. Does the payment amount entered match the monies received?
2. Does the adjustment amount entered match the contractual adjustment amount listed on the remittance advice received?
3. Does the remaining balance match the amount designated as patient responsibility?
Following these three verification steps prior to finalizing any financial transaction posted to the practice management system will ensure accuracy and prevent the financial losses associated with these errors.